# How Gaming Companies Can Optimize Their Taxes and Incentives in 2025

# How Gaming Companies Can Optimize Their Taxes and Incentives in 2025

Companies developing or publishing mobile, PC, or console games often struggle to dedicate sufficient time to tax and incentive matters due to the fast-paced nature of the gaming industry. As a result, startups aiming to optimize their limited resources may unnecessarily face excessive tax burdens.  
In this guide, we detail the relationship between gaming revenues and tax obligations, providing essential insights to help gaming companies optimize their financial structures.

## 1\. What is the tax on gaming industry?

For companies operating in the gaming sector, revenues from digital game sales and in-game purchases (via platforms such as App Store, Google Play, Steam, and Epic Games Store) may benefit from a special corporate tax exemption in Türkiye.

**Corporate Tax Exemption under Law No. 5520**  
According to Article 10/1-ğ of the Corporate Tax Law No. 5520, 50% to 80% of income derived from the sale of digital products to overseas customers is exempt from corporate tax.  
As of 2023, this exemption rate has been updated to **80%**.

Eligible revenue types for this exemption include:

* Revenue from games sold abroad
    
* Revenue from in-game purchases made by foreign users
    
* Licensing income received from foreign platforms (e.g., Steam, Epic Games Store)
    

Since these revenues are considered exports, the standard corporate tax rate of **25%** can be reduced to **4%**.  
For companies operating in **Technoparks** or **free zones**, the effective tax rate can even be reduced to **0%**.

Additionally, if a company earns advertising revenues from abroad (e.g., AdMob, Unity Ads) and operates **outside** of Technoparks, a 20% corporate tax rate applies instead of 25%. This can still be reduced to an effective **4%** through indirect methods.

**Key Tip:**  
Companies with low personnel costs and high in-game revenue should carefully evaluate the pros and cons of operating within a Technopark.

## 2\. Are You Paying VAT or Withholding Tax on Foreign Advertising?

Gaming companies conducting advertising activities abroad may not always be liable for VAT (KDV2) or withholding tax, depending on certain conditions.

**Conditions for VAT and Withholding Tax Exemption on Digital Ads:**  
Gaming companies may be exempt from KDV2 and withholding tax on digital advertising expenditures if:

* The advertising activities exclusively target audiences outside of Türkiye, and
    
* All expenditures are properly documented and fully explainable.
    

Advertising expenses on platforms such as Facebook, Google, TikTok, Twitter, and payments to foreign influencers generally do not trigger a tax burden under these conditions.  
However, if ads target Turkish residents, companies must submit a KDV2 return.

## 3\. Are You Paying VAT on Marketing Software?

Gaming companies publishing games for international markets often use marketing and analytics software to enhance their operations.  
Payments for such software services may not trigger VAT obligations provided that:

* The software service is **entirely for export purposes**, and
    
* The service provider is **not subject to Turkish limited tax liability**.
    

Failure to meet these conditions may result in additional VAT liabilities.

## 4\. Are You Benefiting from Playable Ad and Cloud Service Support Programs?

The Turkish Ministry of Trade provides reimbursement for **60% to 70%** of foreign advertising expenditures made by gaming companies. The annual support limit can reach up to **82 million TL**.

**Cloud Services and Playable Ad Support:**  
In addition to advertising costs, the Ministry also reimburses expenses related to:

* Cloud services (e.g., AWS, Azure, Google Cloud)
    
* Playable ad platforms (e.g., Playable X)
    

Receiving these reimbursements in cash can significantly improve a company's cash flow.

## 5\. Key Recommendations for Maximizing Tax Advantages

* **Evaluate the Cost-Benefit of Technopark or Free Zone Operations:**  
    Analyze whether your company’s structure would benefit more from operating within these special zones.
    
* **Manage Ad Targeting Carefully:**  
    Either completely restrict ad targeting to non-Turkish audiences or clearly segregate Turkish and non-Turkish campaigns to minimize tax audit risks.
    
* **Monitor Software Expenditures:**  
    Ensure that all criteria are met to avoid additional VAT liabilities on marketing and analytics software.
    
* **Understand Support Programs Thoroughly:**  
    Do not rely solely on a literal reading of the Ministry’s incentive regulations. Deeply analyze how the programs are applied in practice to maximize benefits.
    

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